Credit Card Debate over Consumers' IQ

Credit Card Company's lack of disclosure is the issue.

WDW of Florida, you CAN'T agree with Walt of WV because you filed for bankruptcy! All of the people that Walt is condemning are those who DON'T want to file for bankruptcy but have been trapped by deceptive Credit Card debt. Get back on the debtors side of the discussion, the indentured side that was tricked by low low minimum payments. I'm sure anyone who is deeply in debt would agree to rip up all of their cards in exchange for having their current debt forgiven.

As for the doubling of the interest rate for Capital One. Paula of PA, complaining about the rate going from 4.9 to 9.9 percent and condemning Capital One for doing that doesn't seem fair to me. Capital One offered that 4.9 rate for at least two or three years, maybe longer, it was really a nice gesture actually. My only complaint about that situation was for the people who signed up for the 4.9 just a scant few months before it was lifted back to 9.9. I seem to recall the advertising for that rate might have been going on just a few months before the rate was lifted to 9.9.

But still, you can't put that in the category of all the other cards that charge anywhere from 14% to 29% interest and always have.

Credit Card Companies ARE to blame for not disclosing that when you only make the minimum payment, you are actually paying 4 to 5 times the interest rate. Example, a 20% interest rate is actually an 80% to 100% interest rate if you only pay the minimum. On top of that, whatever you bought is depreciating in value, unlike a home that usually will appreciate over time. Yet the banking industry has set up credit card debt as if it were like a mortgage, and for that they should be brought to justice.

I offer a solution on my website http://www.credit-card-cap.com

also on http://www.credit-protector.com.

Alessandro Machi of CA @ Dec 11, 2007 05:27:34 AM

Home Depot charges 20 per cent per month on your balance. Is that 240 per cent per year? My thoughts are Gov won't do a thing about the problem because they don't want the boomers to retire. They can't afford to pay the SS because they have already spent it. So raise taxs-Medical-Fuel etc and keep us off the program.

Marv K of MN @ Dec 10, 2007 21:27:33 PM

Never too late, and sorry

I also have never been late and had my rate changed from a fixed 7.9% to 21.99% by BofA. They had taken over MBNA, and so then had two of my loans instead of one. They then showed late payments on the former MBNA account, even though I had the banks own bill pay service pay them on the due date. I had that reversed, and thought the problems were over. Then they raised my limit on the original BofA account and said I could extend my low promo rate a few months if I used it. After using it, they raised the former MBNA loan to the 21.00%. They said I was using too much of my credit, and wouldn't budge.

I also found out that the home loan that I paid off, and had never paid late, dropped off my credit reports after a few years - that also lowered my credit score. The credit bureaus and Fair Isaac are complicit in this bank abuse.

The 7.9% rate had been in effect only two months after a 0% intro rate, when it was raised. I started a savings account with BofA 50 years ago in Kindergarten, and have been with them continuously for the last 30 years. I went from a manageable debt to one that is very difficult, and may eventually not be possible to pay. I'm doing everything I can to pay it off quickly before the extra interest becomes too much. It's been an extra $1000 in only a few months. I cannot understand treating any customer, much less a loyal long-term customer, in this abusive way.

People must be made aware and boycott abusive lenders. The lenders need to see that the short term gains do not payoff in the long run. Meanwhile, I hope those of us who are caught up in this can survive financially. Sometimes things happen in life where you need to use credit, and that is often the worst time for a sudden added expense. I would hate to be broken at this stage of life by my own bank.

anonymous of CA @ Dec 10, 2007 01:04:33 AM

Credit Cards

Have to agree with Walt of WV about stop your whinning. I had to file bankruptcy 2 years ago because of the interest rates. It was hard at first but got used to the "don't buy unless you can pay" theory. At least 2 times a week I receive notices they will give me (now up to 10M) for signing up. But read the freaking rules and if you don't understand them find someone that does.

WDW of FL @ Dec 09, 2007 13:50:18 PM

Double edged sword

I also agree that the credit card companies take advantage of people but in the same vein, consumers need to read articles like this one or any of the large number of personal finance books that can clue them into the risks of buying on credit.

As long as consumers use credit cards (or any retail credit for that matter) unwisely, the lenders will reap the rewards. Are they unscrupulous and unethical or just profitable capitalists? It depends on if you are the one holding the short end of the stick, doesn't it? Until people start choosing to make purchases with cash instead of using retail credit, I do not believe there is much the government can do to help. As consumers, we need to help ourselves.

LB of CA @ Dec 08, 2007 15:26:53 PM

How do they get away with what they do??

I had a problem with Capital One Bank where I had purchased a year ago. It was for $16,000. and I now owe 2400. They gave or sold my account to a collection agency saying I missed a payment. I didn't miss a payment they collect right out of my account. I paid almost 14,000 dollars in one year........where'd I miss a payment that they take out of my bank. Here's my point...I called them tried to clear this up but they would not talk to me. I have excellent credit and my concern was that they would put this on my credit report. I called an attorney but they don't handle this type of case. I had no where to go. The credit report agencies always seem to take their word over the consumer...........we have to have the proof. This is so wrong. I finally contacted my state banking dept. and the state attorney generals office. It is now cleared to where it should be but I am walking on shells wondering when they do their next act. They not only punish the late payers but anyone that will fall for their tricks.

I will not use Capital One again but which ones can you trust.

Paula of PA @ Dec 08, 2007 13:20:09 PM

To Ann M. Gutierrez of IL

I think you should be able to cancel the fraud protection and insurance. Those are things that usually you have to agree to purchase every month. If they try and talk you out of it, STAND FIRM AND SAY NO. Tell them you will report them if they don't discontinue it immediately!!! Also say you want it in writing that you cancelled it.

Laura Hesselberg of WI @ Dec 07, 2007 18:20:20 PM

Cash Advance Rates

I have a credit card which is mostly Cash Advances. I know this is a risk to the lender, but I have paid on time every month at very high interest rates. The card has been paid off by the amount I have paid plus hundreds of dollars in interest. This is no longer a risk to the card issuer, yet I am still expected to pay those high interest rates. Something needs to be done about this. The debt has been paid, and now they will just sit there earning hundreds of dollars in interest. These are the tactics of a loan shark.

Joan of KS @ Dec 07, 2007 17:35:23 PM